Must consider the reaction of its rivals when it determines its price policy

The concentration ratio is more than 80 percent

Suppose that total sales in an industry in a particular year are $600 million and sales by the top four
sellers are $200 million, $150 million, $100 million, and $50 million, respectively. We can conclude
that:

2,200

Each will realize a $20 million profit

Refer to the above diagram where the numerical data show profits in millions of dollars. Beta's profits
are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If both firms
follow a high-price policy:

Adopting a low-price policy

Refer to the above diagram wherein the numerical data show profits in millions of dollars. Beta's profits
are shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Beta
commits to a high-price policy, Alpha will gain the largest profit by:

D

Refer to the above diagram where the numerical data show profits in millions of dollars. Beta's profits are
shown in the northeast corner and Alpha's profits in the southwest corner of each cell. With independent
pricing the outcome of this duopoly game will gravitate to cell:

A

Refer to the above diagram where the numerical data show profits in millions of dollars. Beta's profits are
shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Alpha and Beta
engage in collusion, the outcome of the game will be at cell:

Beta can increase its profit by lowering its price

Refer to the above diagram where the numerical data show profits in millions of dollars. Beta's profits are
shown in the northeast corner and Alpha's profits in the southwest corner of each cell. If Alpha and Beta
agree to a high-price policy through collusion, the temptation to cheat on that agreement is demonstrated
by the fact that:

produce 7 units at a los of $14

The firm will shut down in the short run, but stay in the industry in the long run if it expects the product price to rise high enough soon

If a purely competitive firm is currently facing a situation where the price of its product is lower than the average variable cost, but it believes that the market demand for its product will increase soon, then:

Supply curve will shift to the right

Profits will decrease

Refer to the graphs above for a purely competitive market in the short run. The graphs suggest that in the long run, assuming no changes in the given information, the firms in the industry will find that: